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Calculation: 1.Total Bad Debts: oExisting bad debts = ₹ 6,000 oAdditional bad debts = ₹ 25,000 oTotal bad debts = ₹ 6,000 + ₹ 25,000 = ₹ 31,000 2.Provision Calculation: oNet receivables after bad debts = ₹ 3,00,000 - ₹ 31,000 = ₹ 2,69,000 oNew provision (10% of ₹ 2,69,000) = ₹ 26,900 oOld provision = ₹ 18,000 oIncrease in provision = ₹ 26,900 - ₹ 18,000 = ₹ 8,900 3.Total impact on P&L: oTotal bad debts (₹ 31,000) + Increase in provision (₹ 8,900) = ₹ 40,000
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